37 straight answers to the questions Australians actually ask about borrowing, deposits, rates and approval — no jargon, no sales pitch. If yours isn't here, ask us directly in a free 15-minute chat.
How the process works, what it costs you, and what to do first.
Nothing, in almost every case. Brokers are paid a commission by the lender that funds your loan, and that commission is disclosed to you in writing before you apply. The rate you're offered is not increased to pay for it — lenders price broker-originated loans the same as their direct channel.
A bank can only offer you its own products and its own credit policy. A broker compares many lenders at once, which matters most when your situation is anything other than plain vanilla — self-employed income, casual or overtime earnings, a low deposit, or a credit blemish. If your file is simple and your bank is already sharp, going direct is fine.
Work out your borrowing power and your true upfront cash requirement before you look at property. Those two numbers set your budget; everything else follows. Then get a pre-approval so you can act when the right property appears.
Conditional (pre-)approval typically takes 1–5 business days. Formal approval after you've found a property usually lands in 5–15 business days, depending on the lender's assessment queue and how quickly the valuation comes back. A complete application at submission is the single biggest driver of speed.
Yes. Every application is recorded as an enquiry on your credit file for five years, and a cluster of enquiries reads as either shopping around desperately or being declined repeatedly. Compare first, apply once — that's the main reason to use a broker rather than applying to three banks yourself.
Photo ID; your last two payslips and most recent PAYG summary or two years of tax returns and financials if self-employed; three to six months of transaction, savings and credit card statements; and evidence of your deposit and its source. Anything unusual in those statements is worth explaining upfront rather than being asked about.
How much you can borrow, how much you need saved, and what changes both.
As a very rough guide, lenders land somewhere between four and six times gross household income, but that range is wide because the real driver is surplus income after an assessed rate buffer of about 3% above the actual rate, your living expenses (floored at a benchmark), and every debt and credit limit you hold.
20% of the purchase price avoids Lenders Mortgage Insurance entirely. You can buy with 5% through the First Home Guarantee if you qualify, or from 5–10% with LMI otherwise. Remember the deposit isn't the whole cash requirement — stamp duty, legals and inspections sit on top.
Yes, meaningfully. Lenders treat your compulsory repayment as a committed monthly expense, which at higher incomes can reduce borrowing power by roughly $50,000–$100,000. Paying out a small remaining balance before you apply sometimes buys back more borrowing power than it costs.
Yes. Lenders assess the limit, not the balance, at roughly 3.8% of the limit per month. A $20,000 card you never use can cost you around $80,000–$100,000 of borrowing capacity. Reducing or closing unused limits before applying is one of the cheapest wins available.
Often yes. A family member offers equity in their property as additional security, which can remove LMI and let you borrow up to 100% of the purchase price plus costs. The guarantee is a real legal liability for them, but it's limited to a set amount and can be released once your LVR falls far enough.
Usually at 80%, and usually only with a two-year history — but some lenders count 100% of overtime for essential-services occupations such as nursing, policing and paramedics. The difference between those two policies on the same payslips is often more than $100,000 of borrowing power.
What rates are doing, and when moving lenders is actually worth it.
It depends on your LVR, loan purpose and income type far more than on the lender's advertised headline. We publish indicative current ranges by borrower type and update them monthly, alongside the RBA cash rate.
The Reserve Bank sets the cash rate target eight times a year, and variable home loan rates generally follow within a few weeks — though lenders decide how much to pass on. Our tracker shows the current rate and every recent decision.
When the annual saving comfortably exceeds the switching costs, and you'll hold the loan long enough to bank it. Discharge, registration and any new lender fees usually total $500–$1,500; a 0.50% saving on a $600,000 loan is around $3,000 a year, so the payback is typically a few months.
Typically $500–$1,500 all in: a discharge fee from your current lender ($150–$400), state mortgage registration and de-registration fees, and sometimes an application or valuation fee at the new lender. Break costs apply if you're leaving a fixed rate, and LMI is payable again if you're above 80% LVR.
Fix for repayment certainty, not to beat the market — fixed rates already price in what the market expects. Stay variable if you value an offset account, unlimited extra repayments, or the freedom to refinance without break costs. Splitting the loan is a legitimate middle path.
Yes. If your property has grown in value, you can increase your loan against the new valuation — generally to 80% LVR without LMI — and take the difference as cash for renovations, landscaping or a deposit on another property. Lenders will ask what the funds are for.
The money that isn't the deposit, and the features that change the maths.
Lenders Mortgage Insurance protects the lender — not you — if you default and the sale doesn't cover the debt. You pay it, as a one-off premium usually capitalised into the loan, whenever you borrow more than 80% of the property's value. On a $700,000 purchase at 90% LVR it's commonly $12,000–$20,000.
It varies by state and is the largest single upfront cost after the deposit. First home buyers receive exemptions or concessions in every state, with thresholds that change regularly — worth calculating for your exact price rather than estimating.
Money in the offset is subtracted from your loan balance before interest is calculated. Your repayment stays the same, so a larger share of it goes to principal each month — which is why the loan is paid off years earlier, not just cheaper each month.
Almost always, because offset savings are effectively tax-free while savings interest is taxable. At a 6% loan rate and a 32.5% marginal tax bracket plus Medicare levy, a savings account needs roughly 9.2% to match an offset — a rate that doesn't exist.
Both reduce interest. An offset is a separate transaction account you can access freely; redraw is money you've already paid into the loan and are pulling back out. Redraw can be restricted or withdrawn by the lender, and for investors, redrawing can taint the tax deductibility of the loan.
Conveyancing ($1,000–$2,500), building and pest inspection ($400–$800), council and water rate adjustments at settlement, loan application or valuation fees, and moving costs. Budget $3,000–$5,000 beyond deposit and stamp duty.
What lenders see, what they forgive, and who says yes when the banks say no.
There's no published minimum. Major banks are generally comfortable above roughly 650 and cautious below 550, but the score is only a filter — the underlying conduct on your file matters more. Non-bank and specialist lenders assess conduct without a score cut-off at all.
Yes. Specialist and non-bank lenders lend against defaults, arrears, and in some cases discharged bankruptcy, pricing for the risk instead of declining. Expect a higher rate and often a lower maximum LVR, with the plan being to refinance back to a prime lender in 12–24 months.
They can, and sometimes do — a strong deposit, long employment and a clear explanation for a one-off event carry weight. But major-bank systems auto-decline below internal thresholds before a human reads the story, which is why the same file often succeeds with a lender that assesses conduct manually.
Yes. Lenders see them on your statements and increasingly on your credit file, and regular BNPL use reads as cash-flow strain regardless of whether you've ever missed a payment. Closing the accounts three to six months before applying is the cleanest fix.
Five years from the date they're listed, and seven for a serious credit infringement — paying it out doesn't remove it, it just marks it as paid. Repayment history information stays for two years, which is why recent conduct matters more than an old default.
Schemes, grants and the questions every first buyer asks.
Yes, through the First Home Guarantee, where the government guarantees the portion of your loan above 80% so no LMI is payable. Price caps apply by location and you must meet the eligibility criteria, but the saving versus paying LMI is typically $15,000–$25,000.
It depends on your state and whether you're buying new or established: a First Home Owner Grant for new builds in most states, stamp duty exemptions or concessions under state thresholds, and the federal First Home Guarantee for the deposit itself. They stack.
It depends on whether prices in your target market are moving faster than you can save. Waiting a year to save another 5% is a loss if the median rises 6% in that year, and a win if it doesn't. Model both — don't decide on sentiment.
Usually three months, sometimes six, and it can be extended with updated payslips. It's conditional — a valuation and final assessment still apply once you find a property — so treat it as a strong indication rather than a guarantee.
Non-standard income and property portfolios.
Two years of tax returns is the standard requirement, but several lenders accept one full year of returns, and alt-doc lenders will assess on BAS statements, an accountant's declaration or six to twelve months of business bank statements.
Expenses in your financials that reduce taxable profit but aren't real cash costs to you — depreciation, one-off expenses, additional superannuation, interest on debts being refinanced, and your own director's wages. Lenders add them back to assessable income, and how generously they do it varies enormously.
Typically 70–80% of gross rent, shaded to allow for vacancy, management fees and maintenance. A few lenders go to 90% for strong applicants. This shading is the main reason investors hit a borrowing wall earlier than they expect.
Yes — this is how most portfolios are built. You release equity up to 80% LVR against your existing property and use it as the deposit and costs on the next one, keeping the loans separate so the investment interest stays cleanly deductible.
Ask a broker directly. 15 minutes, free, no obligation — and you'll get a straight answer even if it's not the one you were hoping for.
General information only, current at the time of writing, and not financial or credit advice. Your circumstances change the answer — talk to us before acting.
